Challenges still exist, such as language barriers: sources
Some multinational companies said Thursday at an international trade fair that they will increase investment in the nation because of their confidence in the country's economic development, but they believe challenges still exist for foreign investment.
The fair was the 19th China International Fair for Investment & Trade, which was held in Xiamen, East China's Fujian Province.
Cargill Inc will increase investment in China because the company has confidence in the country's economic growth, said Ma Zheng, vice president of the US-based multinational company that trades in agricultural commodities.
"Though China faces downward economic pressure, we still believe the central government could improve the current situation and boost market demand," he told the Global Times on Thursday.
Cargill is not the only company that has said it wants to expand in the Chinese market. An Australian company has also shown interest.
"We are keen to engage with China due to China's strong economy," Drew Dickson, CEO of property and financial services company Majella Group, told the Global Times on Thursday. Australia's economic growth has been very stable for years at 3.2 percent, while China's growth is still very strong around 6.5 percent, he noted.
The Guangzhou Aerotropolis Development District Management Committee has set out to establish the China-Australia-New Zealand Free Trade Business Park to stimulate the growth of trade, said a statement the committee sent to the Global Times on Thursday.
Australia's Fukushoku Dairy Pty, a dairy product supplier and distributor, has agreed to enter the park, according to the committee.
There are great investment opportunities in Chinese cities' infrastructure sectors, as China's urbanization is relatively low compared with developed countries, according to Justin Lin Yifu on Thursday, former chief economist of the World Bank.
China has abundant investment resources, Lin said, noting China's governments can provide more fiscal support due to their relatively low fiscal deficits.
In 2015, foreign direct investment (FDI) into China rose 6 percent year-on-year to $136 billion, according to the 2016 World Investment Report released by the United Nations Conference on Trade and Development (UNCTAD) during the fair.
China ranked first among developing countries for a consecutive 24 years in terms of inbound FDI, Chinese Vice Premier Wang Yang said at the fair. He said a total of 850,000 foreign-backed companies have been set up in China, with investment volume reaching $1.7 trillion.
Wang said that a nationwide negative list for foreign investment will be effective on October 1. A negative list shows sectors that remain off-limits to foreign investment.
As China has decided to use a nationwide negative list for foreign investment and reduce restrictions and approvals for foreign-backed enterprises, "I think China will attract large numbers of foreign investors," Ma said.
Chinese authorities recently announced they will set up seven free trade zones (FTZs) in provinces including Northeast China's Liaoning Province and East China's -Zhejiang Province in addition to the current four FTZs, the Xinhua News Agency reported on August 31, citing Minister of Commerce Gao Hucheng.
However, foreign investors in China still face some challenges, sources said.
"Cultural and language differences between China and Australia make it difficult for us to carry out business in China as some of our Chinese clients have specific requirements based on their own culture," Ou Wenfeng, a client relationship executive of Majella Group, told the Global Times on Thursday.
"Also, insufficient market information from the Chinese side and lack of favorable tax policies do not make us want to invest in China," he said.
Ma from Cargill hoped China could further open its agriculture sector.
